China’s corporate deleveraging already well underway

As Beijing shifts focus to SOEs and local governments, corporate lending has already slowed to nearly zero

While China’s economy continues to exceed expectations, Xi Jinping is seizing the opportunity to focus China’s deleveraging campaign on the public sector, reports Bloomberg.

“Policy makers will likely seize this rare opportunity to reduce leverage in the economy in a deeper, longer and more thorough campaign,” Helen Qiao, chief greater China economist at Bank of America Merrill Lynch was quoted as saying. “We will see more measures being rolled out in the second half of 2017 and 2018.”

The shift comes as China has already made huge inroads in scaling back a build-up of liabilities in the private sector: